Corning Shares Sink 19% as Investors Worry AI Infrastructure Spending Is Cooling

Corning shares tumbled 19% on July 28, according to Chaoxiang Research, as investors focused on management's outlook despite a better-than-expected second quarter. Revenue topped expectations, helped by a 65% jump in the enterprise optical communications business, but the midpoint of third-quarter revenue guidance—$4.95 billion—came in slightly below market forecasts. The market read the guidance as a sign that AI infrastructure investment may be losing momentum. Corning's optical communications segment has posted three straight quarters of decelerating year-over-year growth, slowing from 81% to 32%. On July 28, Bank of America Securities cut its price target to $200 from $243 and reiterated a Buy rating. Citigroup Research also lowered its target to $220 from $240 the same day, keeping a Buy rating. Both firms said the sharp selloff looks more like a valuation reset than a weakening of fundamentals, arguing Corning's long-term tailwinds from AI infrastructure remain intact, its optical communications technology moat persists, and long-term supply agreements are increasingly stabilizing the business. Based on the revised targets, Bank of America and Citi see potential upside of 67% and 83%, respectively, from the current share price. (Source: MLion)